Psychology and the deterrence of corporate crime [unknown]

Tom R. Tyler
Research Handbook on Corporate Crime and Financial Misdealing   unpublished
The field of economics has had an enormous and positive influence upon legal scholarship. This influence has occurred in two stages. In the first, the theoretical framework of rational choice shaped arguments about how to structure regulation and has led to the widespread adoption of deterrence models as a primary mechanism for shaping the behavior of people within work organizations (Arlen and Kraakman, 1997; Becker, 1968; Polinsky and Shavell, 2000) . In the second, behavioral economics has
more » ... re recently provided evidence that the assumptions of the rational choice model need to be modified to recognize that decision making exhibits systematic biases. Both of these movements share the important argument that the design of laws and legal institutions should be shaped by their presumed or observed impact upon the behavior of people. And both begin with the assumption that it is the risk and experience of sanctions that are the key to that influence. This chapter argues that policy should be based on a broader model than is often employed in economic analyses. The goal of this review is to improve our understanding of the antecedents of law-related behavior. In particular, in this chapter I argue that there is considerable empirical evidence demonstrating that consent-based models of compliance are also viable mechanisms for deterring misconduct in corporate and other work settings. What is a consent-based model? It is a model that focuses on the legitimacy of the law as a factor motivating compliance (Tyler, 2006a (Tyler, , 2006b . If people believe that legal authority is legitimate they consent to and voluntarily comply with legal rules and the decisions of legal authorities. Sanctions are clearly also important, but given that consent-based models are equally, or in some situations even more, effective it makes sense to move toward a strategy that pays more equal attention to both approaches, which given the current dominance of coercive models means paying greater attention to consensual approaches. More specifically research findings suggest that consensual models are not only as or more effective than are traditional coercion-based models directed at motivating compliance through a sanctioning approach, but that they are much better able to encourage voluntary cooperation with the rules, lessening the difficulties and costs associated with creating and maintaining the type of effective mechanisms of surveillance needed for sanction-based models. Finally, consent-based approaches encourage employee identification with organizations and communities, which broadly encourages employees' engagement in their work organization (Tyler and Blader, 2005; Tyler and Jackson, 2014) . This promotes productivity for companies. * I would like to thank
doi:10.4337/9781783474479.00008 fatcat:nnckwa3w4zbtfdoku2g76kqjw4